High Court ruling boosts investigation into former Ansbacher customers

The decision by the President of the High Court, Mr Justice Finnegan, in favour of the Revenue Commissioners, will give a boost to the Revenue's investigation into former clients of Ansbacher Cayman.

That inquiry has been going on for a number of years. The Dáil was told recently that it had netted €42.15 million to date, mostly by way of payments on account. It is a significant amount of money and the number of settlements reached involves less than half of the identified Ansbacher clients. Also, presumably the larger settlements will come later rather than earlier.

Now the Revenue is to get access to thousands of pages of extra documentation accumulated by the Ansbacher inspectors but not published by them in their voluminous report.

The documentation will be all the more interesting given that the persons who handed over documents or gave interviews did so after being told that material not deemed relevant to the inspectors' remit would remain confidential.

In making his ruling, Mr Justice Finnegan said that any undertaking given by the inspectors - who included judges and barristers - could not prevent him from making an order. "If these individuals and companies have been tax-compliant, they will suffer no disadvantage; if they were not, they will suffer no injustice in discharging their proper liabilities."

He also made the ruling despite the point having been made to him that it might damage future investigations, pointing out that the powers given to inspectors included the right to compel co-operation.

The amount of documentation accumulated by the inspectors is understood to be enormous. The ruling means the Revenue will get access to all the information that concerns persons and companies named in the inspectors' report as having been clients of Ansbacher (Cayman).

The ruling stated that papers associated with a number of people named in the report as not having co-operated with the inquiry should also be handed over to the Revenue. All of the individuals so named, bar one, were found to be clients of Ansbacher, so the Revenue would have received documentation anyway. The exception was Mr John Murphy, of Sanderson Close, London, a director of J Murphy and Sons Ltd, Highgate Road, London. Mr Murphy is 81- years-old and the senior member of Murphy International, a huge group of construction and civil engineering companies.

The third category of persons or companies mentioned in Mr Justice Finnegan's report is perhaps the most interesting. They are people whose affairs were investigated by the inspectors but whom the inspectors decided were not clients of Ansbacher. Their names, therefore, did not appear in the report.

The judge has adjourned the hearing and given permission for the Revenue to come forward in the future if it wants to make an application in relation to any of these persons or companies.

"Each such individual or company should be named in the application." The application should also, he said, set out information to satisfy the court that the case was linked to Ansbacher.

The Revenue, by way of other court orders, has the files of Guinness & Mahon and other entities, relevant to the Ansbacher operation.

It also has its own data bank and is more experienced in the investigation of tax questions than the inspectors were.

The judge has essentially invited the Revenue to return to him if it believes it knows of someone who was investigated by the inspectors and deemed not to have been a client of Ansbacher, but whom the Revenue believes was in fact a client of Ansbacher.

The Revenue would have to support its view in its application, and the judge would then consider whether any papers accumulated by the inspectors relevant to this individual or company should be handed over.

The application would be part of the ongoing series of hearings that began back in 1999 with the appointment of the inspectors. The proceedings are taking place under the provisions of the Companies Acts, rather than the tax laws, and on the face of it any fresh application from the Revenue would take place in open court.

A further hearing relating to Mr Justice Finnegan's ruling is to take place in June and may result in some clarification in relation to this matter. Also, there is always a possibility that his ruling in favour of the Revenue will be appealed to the Supreme Court.